... 6.91 % ...

Dear Readers,

Welcome to our last newsletter of the year.

Once more, we have a lot of information to share with you and hope you will find valuable tips for your insurance, investment, immigration and tax matters.

Christmas and the summer holidays are just around the corner. Our team wishes you a great time with your family, friends and lots of good health for 2010. Please take extra care when travelling on our busy roads during the festive season.

Enjoy the reading, with best regards,

Your Swissfin - Team

CONTENTS

1. INVESTMENTS

• Interest rates: Bank deposits, insurance plans and tax-free investment amounts
• SwissChoices fees reduction

2. TAXES

• Swiss Banking secrecy - an update
• Transfer a home from a company or trust  tax-free
  

3. SHORT-TERM INSURANCE

• All emergency numbers at a glance
• MUA improves policy benefits
• Mutual & Federal premium increases
• New offering for 4x4 drivers
• How geysers are covered on commercial policies
• Old Mutual acquires 100% shareholding of Mutual & Federal
• Your personal items in your car are not insured without all risk cover
• AIG changes name to Chartis Insurance

4. HEALTH CARE COVER

• Very attractive premiums of new Bupa product
• National Health Insurance - what can we expect?

5. IMMIGRATION

• Most applications finalized

6. ESTATE PLANNING

• Costs of winding up an estate

7. OTHER

• Exchange control allowance increased to R 4.0 Mio per taxpayer
• Swiss Financial Consulting can assist you with your bond finance
• SIM card details to be registered - clarification
• Wages for domestic workers to increase as from 1st December
• Are you looking for a housekeeping agent?
• Be careful with custom officials in Johannesburg
• Swiss Financial Consulting to change name and corporate identity
• Opening hours of our office over the festive season
• Calendars 2010
• Seeking part-time employee

1. INVESTMENTS

Interest rates

Swiss Financial Consulting offers the following rates as of 30^th November 2009:

Bank Deposits:

Please contact our office for more information. Conditions apply.

Insurance Plans:

"Guaranteed income plans" (5 year term):

Tax-free interest income - max. investment amounts:

R 923'000 each for taxpayer under the age of 65

R 1'402'000 each for taxpayer over the age of 65

Underlying assumptions: 8.14% effective interest. Couples married in community of property can apply double these amounts.

Long-term insurance rates have increased and look attractive at this level.

Please contact our office for more details or quotes.

Back to Top

SwissChoices fees reduction

We are pleased to announce that the initial fees for new business - especially for large amounts - have been reduced substantially.

Please contact our office for more information.

Back to top

2. TAXES

Swiss Banking secrecy - an update

On Friday 25th September, Switzerland was deleted from the „grey list"of the OECD.
After 6 months of negotiations with various countries, Switzerland signed the twelfth revised double taxation agreement (DTA) with Quatar. The target of 12 new agreements was set by the OECD in March this year in order for any State to comply with their standard and not to be mentioned on their "grey list".

Switzerland has completed their task shortly before the G-20 meeting in Pittsburgh. The new DTAs no longer differentiate between tax fraud and tax evasion for foreigners. They further stipulate that the Swiss authorities will assist foreign States should there be suspicion of tax fraud or evasion. Some agreements have also been amended with new tax rates on foreign interest, dividends and royalties.

So far, the following countries have signed new DTAs with Switzerland: Great Britain, Denmark, Luxemburg, France, Norway, Austria, Mexico, Finland and the USA. The agreement with Spain already meets the necessary requirements and the next countries to sign the new agreements with will be Japan, Holland, Poland and Singapore. Negotiations with Germany are currently being held. At the time of writing this article, we were not aware whether South Africa will soon be signing the new agreement as well.

The Swiss Council had decided that the Swiss Banks have to assist in proven cases of tax evasion and fraud. This however, still needs to be approved by Parliament and maybe by the Swiss population having to cast their vote. There seems to be wide consensus amongst the Swiss that the legislation will be approved. It is interesting to note that the differentiation between tax fraud and evasion will still apply for residents of Switzerland.

The new OECD guidelines not only apply to Switzerland, but will apply to many other countries as well.

So called „Fishing Expeditions" will not be honored. This means that a foreign State needs to clearly identify the tax evader before any information is released. There is also no release of "old" data and only information that was in place when the new agreements were signed will be disclosed.

There are still negotiations of withholding taxes in place. The US and Switzerland have agreed that they will reduce some withholding taxes to zero over the next two years.

What is happening in other countries?

France
The French Revenue Service released a statement that they have knowledge of 3000 French accountholders with funds to the value of CHF 3 Bio. in Switzerland. The French Minister, Mr. Eric Worth, could not say whether these funds were declared or not. The French authorities have denied that they are planning an amnesty but said that offenders would get a once-off chance to come clean with the taxman. It still needs to be seen whether the French Government is just bluffing to intimidate bank clients with undeclared funds.
The French government has not approached the Swiss Banking Confederation yet to assist with the data. The data was most probably released by French banks that have got clients with transactions to or funds placed in Switzerland.
French banks are planning to shut down their operations in countries that remained on the grey list of the OECD.

Liechtenstein
The Monarchy has followed the OECD guidelines as well. They have also concluded a new double taxation with Germany, as many German tax evaders used the small country to hide funds.

The Isle of Man, the Cayman Islands, Luxembourg and Singapore have also released statements saying that they are willing to collaborate with foreign tax authorities in future.

Italy
Their tax authorities are still searching for approx. € 1 billion, which the late Fiat boss Giovanni Agnelli is said to have hidden in Switzerland. The search is a result of a fight of the heirs over his estate. The daughter of the late Fiat boss is suing her mother and her tax consultants.
There is also speculation that the newspaper "Panorama" is in possession of a list of 300 Italian tax evaders with funds abroad.
Italy has introduced a tax amnesty - the third one since 2001 - which will run until the 15th December. One of the conditions is the repatriation of such funds back to Italy ("scudo fiscale").
On the 27th October, 76 financial institutions were raided by the Italian finance police and searched for irregularities. The installation of CCTV cameras at the border posts to Switzerland is a further sign that the Italian government is taking a hard stance on tax evasion.

United States
The Internal Revenue Service (IRS) announced a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts until Oct. 15, 2009.
Those taxpayers who do not voluntarily disclose their hidden accounts by the new deadline face much harsher civil penalties, where applicable, and possible criminal prosecution.
IRS officials decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. More than 14700 US taxpayers disclosed secret offshore bank accounts. US legislators have further proposed a new law that would impose taxes on foreign banks that refuse the identity of American account holders.

South Africa
SARS has released a clear statement of the 6th July which was in our last newsletter.
As mentioned, time is running out for investors to enter tax compliant solutions.

Comment
Maybe there are some positive effects for honest taxpayers with the worldwide chase for undeclared funds. All governments worldwide are under pressure to increase taxes. If more revenue can be generated by getting more taxpayers into the net, the overall tax liability will be carried by more citizens.

The worldwide recession is painful but also has also brought some positive effects - this is one of them.

Back to top

Transfer a home from a company or trust tax-free

If you put a residential property into a company or a trust before 11 February 2009, you can transfer it back into your name without a tax bill. You have until the end of 2011 to do so and there is no transfer duty or CGT payable. The base cost for which the company or trust purchase the property will be used and deferred until you sell the property.
The advantage of such transfer would be the CGT relief of R 1.5 Mio on your primary residence, which trusts and companies do not enjoy.

Back to top

3. SHORT-TERM INSURANCE

All emergency numbers at a glance

In order to assist all our clients in the event of an emergency, please note the following numbers:

General emergency numbers:

Please note that the emergency number of BnB sure must be used in the event of a geyser claim. The insurer does have their own panel of plumbers that can assist you efficiently.

We recommend that you save the relevant numbers on your mobile phone.

Back to top

MUA improves policy benefits

With effect from 1st October 2009, the following changes came into effect:

• Policyholders over the age of 55 have no more excess payable, regardless if it is a motor, household or building claim.
• The sliding excess scale for burst geyser has been removed and the excess under the building section applies to geyser claims as well.

These are great enhancements to an already excellent policy. If you need any further information, please contact our office.

Back to top

Mutual & Federal premium increases

The insurer will be implementing an overall premium increase as from 1st December 2009.
The net effect for most policyholders will be an average 10% increase. Especially building insurance premiums will increase more than average. More details will follow with your renewal schedule. Our office will compare your policy with other insurance companies to make sure that you are not paying excessive premiums.

Back to top

New offering for 4x4 drivers

We would like to remind all our 4x4 enthusiast to insure their vehicles with Cross Country Insurance. Drivers who make regular safaris with modified vehicles are better off by insuring their vehicle(s) with these specialists.
Cross Country offers the following, additional cover:

• Wider geographical cover up to the equator
• Emergency recovery
• Extras such as camping equipment, tents etc. can be insured on the same policy

Please contact our office should you require further information.

Back to top

How geysers are covered on commercial policies

In contrast to domestic building insurance, where geysers itself are covered against bursting etc., these items need to be separately insured under the commercial building section. If you have not specified them, there will be no cover for the geysers. Please note that resultant damages from leaking geysers are covered under the fire or buildings combined section.
Guesthouses and BnB establishments enjoy full geyser cover under the policies of BnB Sure, HIU or Santam.

Back to top

Old Mutual acquires 100% shareholding of Mutual & Federal

Shareholders of insurance company Mutual & Federal approved resolutions giving effect to the acquisition of the company by financial services giant Old Mutual.
Old Mutual, which owns about 73.5% of Mutual & Federal, offered R21.25 per Mutual & Federal share.
Julian Roberts, group chief executive of Old Mutual, said, "We are delighted that the Mutual & Federal shareholders have overwhelmingly voted to accept our offer.
"Customers, staff and shareholders can now look forward to the future of the business. For Old Mutual this represents a further step in building shareholder value."
Old Mutual said it continues to monitor the progress of the acquisition and is working with Mutual & Federal management on all aspects of the transaction.
The deal is subject to regulatory approval.

Back to top

Your personal items in your car are not insured without all risk cover

We recently had several claims where clients were victims of "smash and grab" incidents. Please do not leave any items that are visible from the outside unattended in your car. Even if you are driving, do not leave handbags, laptops etc. on the seats. Unfortunately, such items are objects of "smash and grab" robberies at intersections, whilst your car is stationery.
Also please note that you have to insure certain personal effects under the "General All Risk Section" of your policy. Items like cellphones, laptops etc. need to be insured under that specified section of your policy.

Back to top

AIG changes name to Chartis Insurance

The American insurer has changed its name as from the 2nd November 2009. All other details remain unchanged.
Current AIG policies will remain fully valid and continue to be underwritten by Chartis.

Back to top

4. HEALTH CARE COVER

Very attractive premiums of new Bupa product !

As mentioned in our last newsletter, Bupa has started offering their new product in July. The product is a modular system and similar to the IHI offerings.
We have put the following premium overview together:

Annual premiums in Euro:

Please note that the hospital plan pays for a single room, 100% of costs covered and you can even choose to have treatment anywhere in the world, except North America.
Especially younger persons can enjoy superior cover at a fraction of the premium of a local health insurance.

Back to top

National Health Insurance (NHI) - what can we expect?

The government wants to introduce the NHI to bring health cover to all South Africans. To fund the scheme, the government needs approx. R 100 Bio. from already over-stretched taxpayers.

There are also rumours that medical aid schemes are not allowed to offer benefits that are supplied at State Hospitals - otherwise the member has to pay out of his own pocket for the use of private facilities. This would mean fewer patients at private hospitals and some medical schemes could face collapse. Medical schemes are allowed to offer "top-up-cover" for treatment above NHI limits in a private hospital, provided the member can afford it.

Whilst everybody agrees with the Government's intention of the NHI, the proposals were looked at cautiously. The funding would cost taxpayers between 1.75% and 2.5% of their taxable income with employers contributing an equal additional portion. Medical schemes will collect fees for the top-up-cover.

It is still a long way until the final model is introduced. Whilst only 15% of the SA population has got health care cover, there is certainly a need to review our current health care system. The government wants to implement the NHI over the next 5 years, that is, by 2014.

At the beginning of November, we received information that the plan has been put on hold. The medium term budget did not allocate funds for the next 3 years for the project. Government first wants to focus on upgrading hospitals and its management before the NHI can be introduced.

We will keep you informed on further developments.

Back to top

5. IMMIGRATION

Most applications finalized

It is rare that one can report positive matters about the Department of Home Affairs, but they have managed to approve most outstanding permanent residence applications. A team of experts was in Cape Town early this year and has managed to approve almost all the applications. One of our applicants had his permit issued within two months.
We hope that the Department can keep up this pace and does not fall behind schedule again, thinking that the work has been done now.

Back to top

6. ESTATE PLANNING

Costs of winding up an estate

Following our article in the last newsletter, we received enquires about the costs of winding of an estate.
It is important to note that there is no estate duty if a surviving spouse is the heir. Should an estate be inherited by anybody else, estate duty of 20% is payable over the value of the estate of R 3.5 Mio. If a deceased spouse has not made use of the abatement, the amount is increased to R 7.0 Mio. for the last surviving spouse.
Executor's fees are applicable to the portion of the estate of the deceased, which is laid down by the Government and is 3.5% excl. VAT.
We feel that the Government should abolish estate duty, as the tax does not apply to most citizens. Further, the income from estate duty is very small portion of the overall State's income and the administration costs are very high.

Back to top

7. OTHER

Exchange control allowance increased to R 4.0 Mio per taxpayer

Our new Finance Minister, Mr. Pravin Gordhan, announced during his medium term budget speech on the 28th October that the capital allowance for resident individuals was increased.
There will be more wide-ranging relaxation of exchange controls in the budget speech in February next year.
We welcome the Ministry's decision to relax exchange control and promote regional integration. Please note that these changes are not in effect yet but will probably be introduced very shortly.

Back to top

Swiss Financial Consulting can assist you with your bond finance

Should you require assistance with a better rate or terms for your home loan, please contact us. We have entered an agreement with a specialised company that can look at your current conditions and maybe offer you better opportunities.

Back to top

SIM card details to be registered - clarification

Following the article in our last newsletter, we would like to point out to clients that so called "pre-paid" phones also need to be registered in line with the new legislation.

Back to top

Wages for domestic workers to increase as from 1st December

According to the Department of Labour, the new minimum wages for domestic workers who work more than 27 hours per week will be as follows: Hourly rate R 7.40, weekly rate R 333.13 and the monthly R 1442.86.
Domestic workers who work less than 27 hours a week will earn R 8.74 per hour.

Back to top

Are you looking for a housekeeping agent?

Many of our European clients, who only spend little time in South Africa, have asked us in the past for references on housekeeping services. We are pleased to tell you that we have found a Swiss property agency that will look after your home whilst you are overseas. If you require further information, please do not hesitate to contact us for further details.

Back to top

Be careful with custom officials in Johannesburg

In a rather sad incident, clients of ours were robbed by a custom official at OR Tambo airport in Johannesburg. The clients had to leave their international flight and transfer to a local flight to Cape Town. A custom official held them up and searched their suitcases. He used the client's nervousness of missing their connection flight and stole a valuable watch. If you are searched by a custom official, make sure you take down his name and keep your eyes on what he is doing.

Back to top

Swiss Financial Consulting to change name and corporate identity

We are excited to announce that our company's name will change to "SWISSFIN" as from next year. We felt that the previous name was too long and the new one still incorporates our "swissness".
In that context we will adjust our logo as well which will be revealed next year.

Back to top

Opening hours of our office over the festive season

Please note that your office will be opened as usual, except the 24th and 31st December, where the office will be closed from 12 pm.

Calendars 2010

Please note that we already have the new Mutual & Federal Calendars for 2010. If you would like to have one of the samples, please contact our offices and we will gladly send you one.

Back to top

Seeking part-time employee

The position offers independent working with high responsibilities, interesting and challenging tasks. You will be part of a young, dynamic team that services clients in a positive working environment.

Applicants with a neat appearance, good communication skills and who prefer working in a team should please send their CV to Mr. Hug ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).